Nerve growth factor (NGF) transcripts were identified in normal human keratinocytes in primary and secondary culture. The expression of the NGF mRNA was strongly down-regulated by corticosteroids and was maximal when keratinocytes were in the exponential phase of growth. Immunofluorescence studies on growing keratinocytes colonies and on elutriated keratinocytes obtained from growing colonies and mature stratified epithelium showed specific staining of the Golgi apparatus only in basal keratinocytes in the exponential phase of growth. The keratinocyte-derived NGF was secreted in a biologically active form as assessed by neurite induction in sensory neurons obtained from chick embryo dorsal root ganglia. Based on these data we suggest that the basal keratinocyte is the cell synthesizing and secreting NGF in the human adult epidermis. The paracrine secretion of NGF by keratinocytes might have a major role in regulating innervation, lymphocyte function, and melanocyte growth and differentiation in epidermal morphogenesis as well as during wound healing.